Your SlideShare is downloading. ×
_____________________________________________________________________




           Merrion Capital Investment Funds plc
...
IMPORTANT INFORMATION

The Directors of the Company, whose names appear on page (III), accept responsibility for the
infor...
DIRECTORY

Directors                                              Registered Office

Mr. Kevin Gallacher                  ...
DEFINITIONS

 The following definitions apply throughout this Prospectus unless the context requires otherwise:-

 “Acts” ...
“Distribution Agreement”       means the agreement dated 12 October 2006
                               entered into betwe...
Taxes Act which has made a Relevant
            Declaration which is in the possession of
            the Company prior to...
(xiv) an Intermediary acting on behalf of
                                                persons who are neither Irish Re...
“Irish Resident”                      means any person Resident or Ordinarily Resident
                                   ...
(v)      CREST;
                              (vi)     Depository Trust Company of New York;
                             ...
carries on a trade in Ireland, and either the
                  company is ultimately controlled by persons
              ...
successors;

“Share(s)”                   means the Participating Shares of no par value in
                             t...
Fund is calculated as set out in the applicable
  Supplement.




XII
TABLE OF CONTENTS

THE COMPANY
Introduction
Investment Objectives, Policies and Restrictions
Dividend Policy
General Risk ...
GENERAL INFORMATION
Share Capital
Memorandum & Articles of Association
Reports
Inspection of Documents
Miscellaneous

APPE...
THE COMPANY

Introduction

The Company was incorporated on 28 September 2006 with registered number 427248 as an open-
end...
institutionally linked to the base currency. The use of such forwards would reduce the currency risk in
respect of each Fu...
guarantee that this objective will be achieved and consequently there is therefore a currency exchange
risk which may affe...
Cross liability between funds

The Company is established as a segregated portfolio company. As a matter of Irish law, the...
MANAGEMENT AND ADMINISTRATION

The Directors of the Company

The Directors of the Company are responsible, inter alia, for...
The Distributor

The Company has appointed Rabodirect (a registered business name in Ireland of Cooperatieve
Centrale Raif...
The Investment Manager, the Custodian, the Administrator and/or their affiliates may invest, directly
or indirectly, or ma...
SUBSCRIPTIONS, TRANSFERS AND REDEMPTIONS

Subscriptions

The Directors shall, before the Initial Offer of Shares in any Fu...
equivalent), and the names and addresses of all directors and beneficial owners. Detailed verification
of directors' and s...
name of the transferee is entered in the Company’s register of members in respect of those Shares. In
respect of the Share...
Conversion of Shares

With the consent of the Directors, a Shareholder may convert Shares of one Fund into Shares of
anoth...
Subscriptions, transfers, conversions and redemptions for any Fund will be suspended for as long as
the calculation of the...
VALUATION

Net Asset Value

The Net Asset Value of the Company and of each Fund or of each class of Shares, as the case ma...
(d)     the Directors shall have the discretion, subject to the approval of the Custodian, to determine
        the basis ...
dealt in). If, in the sole opinion of the Directors, the dealing price (which will be the
      latest mid-market price) f...
(5)     Currencies or values in currencies other than in the currency of designation of a particular
        Fund shall un...
The Net Asset Value per Share of each Fund as calculated for each Valuation Point will be published
daily on the Investmen...
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Merrion Capital Investment Funds plc
Upcoming SlideShare
Loading in...5
×

Merrion Capital Investment Funds plc

692

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
692
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Merrion Capital Investment Funds plc"

  1. 1. _____________________________________________________________________ Merrion Capital Investment Funds plc An open-ended investment company with variable capital incorporated in Ireland with registered number 427248 established as an umbrella fund with segregated liability between Funds. PROSPECTUS 7 October 2008 _____________________________________________________________________ McCann FitzGerald Solicitors Riverside One Sir John Rogerson’s Quay Dublin 2 #1274745 I
  2. 2. IMPORTANT INFORMATION The Directors of the Company, whose names appear on page (III), accept responsibility for the information contained in this Prospectus. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information. The Company has been authorised by the Financial Regulator as an undertaking for collective investment in transferable securities pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003, as amended. The authorisation of the Company by the Financial Regulator is not an endorsement or guarantee of the Company by the Financial Regulator nor is the Financial Regulator responsible for the contents of this Prospectus. In addition, the authorisation of the Company by the Financial Regulator shall not constitute a warranty as to the performance of the Company and the Financial Regulator shall not be liable for the performance or default of the Company. Investors should note that since transferable securities may depreciate as well as appreciate in value, no assurance can be given by the Company or the Directors or any of the persons referred to in this Prospectus that the Company will attain its objectives. The price of Shares, in addition to the income therefrom, may decrease as well as increase. Accordingly, an investment should only be made where the investor is or would be in a position to sustain any loss on his or her investment. In addition investors should note that some Funds in the Company may invest in emerging markets, below investment grade securities and equity warrants and that, therefore, an investment in the UCITS should not constitute a substantial proportion of an investment portfolio and may not be appropriate for all investors. The difference at any one time between the sale and repurchase price of the Shares of any Fund means that the investment should be regarded as medium to long term. Subject to the requirements of the Financial Regulator some of the Funds may use financial derivative instruments for investment purposes. While the prudent use of such derivatives can be beneficial, derivatives also involve risks different from, and in certain cases, greater than, the risks presented by more traditional investments. Structured derivative transactions are complex and may involve a high degree of loss. Investors’ attention is drawn to the “General Risk Factors” set out on page 2. Prospective investors should not treat the contents of this Prospectus as advice relating to legal, taxation, investment or any other matters. Prospective investors should inform themselves as to: (a) the legal requirements within their own jurisdictions for the purchase, holding or disposal of Shares; (b) any applicable foreign exchange restrictions; and (c) any income and other taxes which may apply to their purchase, holding or disposal of Shares or payments in respect of Shares. Shareholders should note that all or part of the management fee and expenses of a Fund may be charged to the capital of a Fund as set out in the applicable Supplement. This may have the effect of lowering the capital value of the Shareholder’s investment. Thus on redemptions of holdings Shareholders may not receive back the full amount invested. If investors are in any doubt regarding the action that should be taken, they should consult their stockbroker, bank manager, solicitor, accountant or other professional adviser. The distribution of this Prospectus and the offering of the Shares in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are required by the Company to inform themselves about and to observe any such restrictions. This Prospectus does not constitute, and may not be used for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. This document may not be authorised or distributed in any jurisdiction unless it is accompanied by the Company’s most recent annual or interim report (when available). Such reports and this document (and any Supplement attached hereto) together constitute the Prospectus for the issue of Shares in the Company. II
  3. 3. DIRECTORY Directors Registered Office Mr. Kevin Gallacher George’s Court Mr. Brian Hall 54 - 62 Townsend Street Mr. Joseph O’Dwyer Dublin 2 Mr. Michael Hodson Ireland Mr. John Conroy Promoter and Investment Manager Administrator, Registrar and Transfer Agent Merrion Capital Investment Managers Limited Northern Trust International Fund Administration International House Services (Ireland) Limited 3 Harbourmaster Place George’s Court International Financial Services Centre 54 - 62 Townsend Street Dublin 1 Dublin 2 Ireland Ireland Custodian Project Manager and Legal Advisers in Ireland Northern Trust Fiduciary Services (Ireland) Limited McCann FitzGerald George’s Court Riverside One 54 - 62 Townsend Street Sir John Rogerson’s Quay Dublin 2 Dublin 2 Ireland Ireland Distributor Company Secretary of the Company Rabodirect (a registered business name in Ireland of Northern Trust Investor Services (Ireland) Limited Cooperatieve Centrale Raiffeisen-Boerenleenbank George’s Court B.A.) 54 - 62 Townsend Street George’s Dock House Dublin 2 International Financial Services Centre Ireland Dublin 1 Ireland Auditors KPMG Chartered Accounts 1 Harbourmaster place International Financial Services Centre Dublin 1 Ireland III
  4. 4. DEFINITIONS The following definitions apply throughout this Prospectus unless the context requires otherwise:- “Acts” means the Companies Acts 1963 to 2005 and every statute or other provision of law modifying, extending or re-enacting them or any of them; “Administrator” means Northern Trust International Fund Administration Services (Ireland) Limited or such other person or persons from time to time appointed by the Company as the administrator of the Company in accordance with the requirements of the Financial Regulator; “Administration Agreement” means the agreement dated 17 October 2006 entered into between the Company and the Administrator; “Articles of Association” means the articles of association of the Company; “Business Day” means unless determined by the Directors and notified in advance to Shareholders, a day excluding Saturday or Sunday on which banks are normally open for business in Dublin and London; “Cash Deposits” means deposits (i) that are repayable on demand; or have the right to be withdrawn; and (ii) which have a maturity date of no more than twelve months; “Closing Date” means the closing date of the Initial Offer in respect of a Fund as set out in the applicable Supplement; “Collective Investment Schemes” means UCITS and/or Collective Investment Schemes other than UCITS in which the Funds may invest pursuant to Guidance Note 2/03; “Company” means Merrion Capital Investment Funds plc; “Custodian” means Northern Trust Fiduciary Services (Ireland) Limited, or such other person or persons from time to time appointed by the Company as the Custodian of the Company with the prior approval of the Authority; “Custodian Agreement” means the agreement dated 17 October 2006 entered into between the Company and the Custodian; “Directors” means the board of directors of the Company, whose names appear on page (III); “Distribution Share Classes” means those share classes in respect of which it is proposed to pay dividends and which are identifiable by the use of the word “Distribution” in their title as set out in the applicable Supplement; IV
  5. 5. “Distribution Agreement” means the agreement dated 12 October 2006 entered into between the Distributor and the Company; “Distributor” means Rabodirect (a registered business name in Ireland of Cooperatieve Centrale Raiffeisen Boerenleenbank B.A.) or such other person or persons appointed by the Company; “Euro” or “€” means the currency referred to in the second sentence of Article 2 of the Council Regulation (EC) No. 974/98 of 3 May 1998 and as adopted as the single currency of the participating Member States of the European Union; “Exempt Irish Resident” means:- (i) a pension scheme which is an exempt approved scheme within the meaning of section 774 of the Taxes Act, or a retirement annuity contract or a trust scheme to which section 784 or 785 of the Taxes Act applies which has made a Relevant Declaration which is in the possession of the Company prior to the occurrence of a chargeable event; (ii) a company carrying on a life business, within the meaning of section 706 of the Taxes Act which has made a Relevant Declaration which is in the possession of the Company prior to the occurrence of a chargeable event; (iii) an Investment Undertaking within the meaning of section 739B of the Taxes Act which has made a Relevant Declaration which is in the possession of the Company prior to the occurrence of a chargeable event; (iv) a special investment scheme within the meaning of section 737 of the Taxes Act which has made a Relevant Declaration which is in the possession of the Company prior to the occurrence of a chargeable event; (v) a unit trust, to which section 731(5)(a) of the Taxes Act applies which has made a Relevant Declaration which is in the possession of the Company prior to the occurrence of a chargeable event; (vi) a charity exempt from income tax by virtue of section 207(1)(b) of the Taxes Act which has made a Relevant Declaration which is in the possession of the Company prior to the occurrence of a chargeable event; (vii) a qualifying management company within the meaning of section 734 (1) of the V
  6. 6. Taxes Act which has made a Relevant Declaration which is in the possession of the Company prior to the occurrence of a chargeable event; (viii) a specified company within the meaning of section 734 (1) of the Taxes Act which has made a Relevant Declaration which is in the possession of the Company prior to the occurrence of a chargeable event; (ix) a person exempt from income tax and capital gains tax by virtue of section 784A(2) of the Taxes Act, where the shares held are assets of an approved retirement fund or an approved minimum retirement fund and the “qualifying fund manager” (within the meaning of section 784A of the Taxes Act) has made a Relevant Declaration which is in the possession of the Company prior to the occurrence of a chargeable event; (x) a person exempt from income tax and capital gains tax by virtue of section 848E of the Taxes Act where the shares held are assets of a special savings incentive account and the “qualifying savings manager” (within the meaning of section 848B of the Taxes Act) has made a Relevant Declaration which is in the possession of the Company prior to the occurrence of a chargeable event; (xi) a person exempt from income tax and capital gains tax by virtue of section 787I of the Taxes Act where the shares held are assets of a Personal Retirement Savings Account (within the meaning of Chapter 2A of Part 30 of the Taxes Act) and the PRSA Administrator (within the meaning of Chapter 2A) has made a Relevant Declaration which is in the possession of the Company prior to the occurrence of a chargeable event; (xii) a Credit Union within the meaning of section 2 of the Credit Union Act 1997 which has made a Relevant Declaration which is in the possession of the Company prior to the occurrence of a chargeable event; (xiii) a company in respect of its investment in a money market fund within the meaning of Regulation (EC) No 2423/2001 of the European Central Bank of 22/11/2001, where such company is within the charge to corporation tax and has made a declaration to that effect to the Company and has supplied details of its corporation tax reference number to the Company; VI
  7. 7. (xiv) an Intermediary acting on behalf of persons who are neither Irish Resident nor Ordinarily Resident in Ireland for tax purposes or an Intermediary acting on behalf of Irish Resident persons listed above which has made a Relevant Declaration which is in the possession of the Company prior to the occurrence of a chargeable event; (xv) any other Irish Resident or person ordinarily Resident in Ireland who may be permitted to own Shares under taxation legislation or by written practice or concession of the Revenue Commissioners without giving rise to a charge to tax in the Fund or jeopardising tax exemptions associated with the Fund giving rise to a charge to tax in the Fund provided that they have completed the appropriate statutory declaration under Schedule 2B of the Taxes Act. “Financial Regulator” means the Irish Financial Services Regulatory Authority or any successor thereto; “Funds” means the Initial Funds or any further fund or funds to be established by the Company; “Initial Funds” means the Merrion Balanced Fund, the Merrion Growth Fund and the Merrion Irish Opportunities Fund; “Initial Offer” means the initial offer of Shares in a Fund as set out in the applicable Supplement; “Intermediary” means a person who (a) carries on a business which consists of, or includes, the receipt of payment from an investment undertaking on behalf of other persons, or (b) holds units in an investment undertaking on behalf of other persons; “Investment Grade” means a rating of BBB- or higher as rated by S&P or Baa3 or higher as rated by Moody’s or an equivalent rating or, in the opinion of the Investment Manager, is of comparable quality; “Investment Manager” means Merrion Capital Investment Managers Limited or such other person or persons from time to time appointed by the Company as the Investment Manager of the Company in accordance with the requirements of the Financial Regulator; “Investment Management Agreement” means the agreement dated 17 October 2006 entered into between the Company and the Investment Manager; “Ireland” means the Republic of Ireland; VII
  8. 8. “Irish Resident” means any person Resident or Ordinarily Resident in Ireland for tax purposes; “Minimum Holding” means the minimum holding, if any, in respect of any Fund as set out in the applicable Supplement; “Minimum Redemption” means the minimum redemption, if any, in respect of any Fund as set out in the applicable Supplement; “Minimum Subscription” means the minimum subscription, if any, in respect of any Fund as set out in the applicable Supplement; “Money Market Instruments” means instruments normally dealt in on the money market which:- (i) are liquid, i.e. capable of being converted to cash within seven Business Days at a price closely approximating their current value; and (ii) have a value which can be accurately determined at any time; “Moody’s” means Moody’s Investors Services and its successors; “Net Asset Value” means the net asset value of the Company or of a Fund or of a class of Shares of a Fund as more fully described in the section headed “Valuation” on page 14; “OECD” and “OECD Member” means the Organisation of Economic Co- operation and Development and any member country thereof, respectively; “Ordinarily Resident in Ireland” means an individual who has been Resident in Ireland for three consecutive tax years with effect from the commencement of the fourth tax year save that an individual who has been Ordinarily Resident in Ireland will continue to be Ordinarily Resident in Ireland until the commencement of the fourth consecutive tax year in which he/she is not Resident in Ireland; “Participating Share” means a participating share in the capital of the Company of no par value, issued subject to, and in accordance with the Acts, the Regulations and the Memorandum and Articles of Association of the Company; “Qualifying Company” means a qualifying company within the meaning of Section 110 of the Taxes Act; “Recognised Clearing System” means any of the following clearing systems:- (i) Deutshe Bank AG, Depository and Clearing Centre; (ii) Central Moneymarkets Office; (iii) Clearstream Banking SA; (iv) Clearstream Banking AG; VIII
  9. 9. (v) CREST; (vi) Depository Trust Company of New York; (vii) Euroclear; (viii) Monte Titoli SPA; (ix) Netherlands Centraal Instituut voor Giraal Effectenverkeer BV; (x) National Securities Clearing System; (xi) Sicovam SA; (xii) SIS Sega Intersettle AG; (xiii) The Canadian Depository for Securities Ltd; (xiv) VPC AB (Sweden); and (xv) Any other system for clearing securities which is designated by the Revenue Commissioners as a recognised clearing system; “Recognised Market” means any regulated stock exchange or market which is provided for in the Articles of Association, details of which are set out in Appendix II to this Prospectus; “Redemption Date” means the relevant Business Day on which the Shares in a Fund can be redeemed as set out in the applicable Supplement; “Regulations” means the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003, as amended; “Relevant Declaration” means the declaration relevant to the Shareholder as set out in Schedule 2B of the Taxes Act; “Relevant Period” means in relation to a Share in a Fund, a period of 8 years beginning with the acquisition of a Share by a Shareholder and each subsequent period of eight years beginning immediately after the preceding Relevant Period for as long as the Shareholder holds the Share; “Resident in Ireland” means any person resident in Ireland for the purposes of Irish tax. The following is a summary of how different categories of persons/ entities may be treated as resident in Ireland for this purpose. Company A company will be Resident in Ireland if its central management and control is exercised in Ireland irrespective of where it is incorporated. For Ireland to be treated as the location for central management and control this typically means that Ireland is the location where all fundamental policy decisions of the company are made. A company which does not have its central management and control in Ireland but which is incorporated in Ireland is Resident in Ireland except where:- (a) the company or a related company (as described in section 23A of the Taxes Act) IX
  10. 10. carries on a trade in Ireland, and either the company is ultimately controlled by persons resident in a Member State or, resident in a territory with which Ireland has a double taxation treaty (a “treaty territory”), and the company is not ultimately controlled by persons who are not so resident, or the principal class of shares of the company (or that of a related company) is substantially and regularly traded on one or more recognised stock exchanges in any Member State or treaty territory; or (b) the company is regarded as resident in a territory other than Ireland and is not Resident in Ireland under a double taxation treaty between Ireland and another territory. It should be noted that the determination of a company’s residence for tax purposes can be complex in certain cases and declarants are referred to the specific legislative provisions which are contained in section 23A of the Taxes Act. Individual An individual will be regarded as being resident in the Ireland for the purposes of Irish tax if for a particular tax year he or she:- (a) is present in Ireland for 183 days or more in that tax year; or (b) has a combined presence of 280 days in Ireland, taking into account the number of days spent in Ireland in that tax year together with the number of days spent in Ireland in the preceding tax year. Presence in Ireland by an individual of less than 30 days in any tax year will not be reckoned for the purpose of applying this two-year test. Presence in Ireland for a day means the personal presence of an individual at the end of the day (midnight). Trust A trust will be Resident in Ireland and Ordinarily Resident in Ireland for the purposes of Irish capital gains tax unless the general administration of the trust is ordinarily carried on outside Ireland and the trustees (being a single and continuing body of persons) or a majority of them for the time being are not Resident in Ireland or Ordinarily Resident in Ireland; “S&P” means Standard & Poor’s Corporation and its X
  11. 11. successors; “Share(s)” means the Participating Shares of no par value in the capital of the Company; “Shareholder” means a holder of Shares in the Company; “Sterling” or “£” means pounds sterling, the currency of the United Kingdom; “Subscriber Share” means a subscriber share of €1.00 each in the capital of the Company; “Subscription Date” means the relevant Business Day on which Shares in a Fund can be purchased as set out in the applicable Supplement; “Supplement” means a supplement to this Prospectus containing information relating to a Fund(s); “Taxes Act” means the Taxes Consolidation Act 1997 (as amended) of Ireland; “Transferable Securities” means shares in companies and other securities equivalent to shares in companies, bonds and other forms of securitised debt, and any other negotiable securities which carry the right to acquire any such Transferable Securities by subscription or exchange other than techniques and instruments utilised for efficient portfolio management; “UCITS” means an undertaking the sole object of which is the collective investment in Transferable Securities and/or other liquid financial assets permitted under the Regulations of capital raised from the public and which operates on the principle of risk- spreading and the units/shares of which are at request of the holders repurchased or redeemed directly or indirectly out of those undertakings’ assets. Action taken by a UCITS to ensure that the stock exchange value of its units does not vary significantly from their net asset value shall be regarded as equivalent to such repurchase or redemption. Other liquid financial assets include cash deposits, financial derivative instruments, other collective investment undertakings index tracking funds and Money Market Instruments; “UCITS Notices” means the series of UCITS notices, memorandums, guidelines and letters issued by the Financial Regulator; “Valuation Date” means the relevant Business Day on which the Net Asset Value of a Fund is calculated as set out in the applicable Supplement. For the avoidance of doubt, there will be a valuation date in respect of each Subscription Date and Redemption Date; and “Valuation Point” means the relevant time in respect of each Valuation Date at which the Net Asset Value of a XI
  12. 12. Fund is calculated as set out in the applicable Supplement. XII
  13. 13. TABLE OF CONTENTS THE COMPANY Introduction Investment Objectives, Policies and Restrictions Dividend Policy General Risk Factors MANAGEMENT AND ADMINISTRATION The Directors of the Company The Investment Manager and Promoter The Distributor The Administrator The Custodian Conflicts of Interest SUBSCRIPTIONS, TRANSFERS AND REDEMPTIONS Subscriptions Transfers Redemptions Conversion of Shares Deferral of Redemptions Compulsory Redemptions Suspension of Subscriptions, Transfers Conversions and Redemptions Investor Restrictions Abusive Trading Practices VALUATION Net Asset Value Allocation of Assets and Liabilities Valuation Principles Suspension of Valuation Publication of Net Asset Value FEES AND EXPENSES Investment Management Fee Performance Fee Administration Fee Custodian Fee Directors’ Remuneration Establishment Expenses Other Expenses TAXATION Ireland MATERIAL CONTRACTS The Investment Management Agreement The Administration Agreement The Custodian Agreement The Distribution Agreement XII
  14. 14. GENERAL INFORMATION Share Capital Memorandum & Articles of Association Reports Inspection of Documents Miscellaneous APPENDIX I Investment and Borrowing Restrictions APPENDIX II List of Recognised Markets XIII
  15. 15. THE COMPANY Introduction The Company was incorporated on 28 September 2006 with registered number 427248 as an open- ended umbrella-type investment company with variable capital. It is authorised in Ireland by the Financial Regulator as a UCITS pursuant to the Regulations. The liability of the members is limited. The Company is organised in the form of an umbrella fund with segregated liability between Funds. The Articles of Association provide that the Company may offer separate classes of Shares each representing interests in a Fund. Each Fund will have a distinct portfolio of investments, and more than one class of Shares may be issued in respect of any Fund with the prior approval of the Financial Regulator. The Company may from time to time create additional classes of Shares (details of which will be set out in the relevant Supplement) within a Fund in accordance with the requirements of the Financial Regulator. Separate books and records will be maintained for each Fund. The Directors may, in their absolute discretion, differentiate between the rights attaching to the different classes of Shares within a particular Fund including, without limitation, the dividend policy, the level of management fees, the subscription charge and/or the redemption charge payable in respect of each class. The Company may from time to time create such additional Funds as the Directors may deem appropriate and with the prior approval of the Financial Regulator. Details of any Fund or Funds created in the future shall be as set out in the applicable Supplement in accordance with the requirements of the Financial Regulator. The applicable Supplement shall form part of, and should be read in conjunction with, this Prospectus. At the date hereof, the three Initial Funds of the Company are the Merrion Balanced Fund, the Merrion Growth Fund and the Merrion Irish Opportunities Fund. The Investment Manager will manage each Fund in a way which prudently reflects the risk implicit in a direct investment of a similar nature. The assets, liabilities, income and expenditure allocated to each Fund will be separate from those of the other Funds. However, the Company as a whole will remain liable to third parties for all of the liabilities of the Company that are not attributable to a particular Fund. The Company is denominated in Euro. Investment Objectives, Policies and Restrictions The assets of each Fund will be invested in accordance with the investment objectives and policies of that Fund as set out in the applicable Supplement. The Company and its Directors, in consultation with the Investment Manager, are responsible for the formulation of the investment policy of each Fund and any subsequent change to that policy. Each Fund is subject to the investment and borrowing restrictions contained in the Regulations and UCITS Notices as set out in Appendix I. Additional restrictions (if any) relevant to each Fund will be as set out in the applicable Supplement. Any amendment to the investment objective and/or policy is the responsibility of the Directors who may change the investment objective and policy of each Fund provided that Shareholders are given reasonable notice of such change. Furthermore, any change in the investment objective or material change to the investment policy of a Fund will only be effected following a resolution of a majority of the voting Shareholders of that Fund It is not currently the intention to utilise financial derivative instruments. However, the Company may do so in the future, details of which will be set out in the applicable Supplement and will be subject always to the submission to and clearance by the Financial Regulator of a risk management process. In circumstances where the Financial Regulator is satisfied with such risk management process, the Company may enter into a variety of derivative instruments including, but not limited to, foreign exchange forwards, futures, options, swaps, warrants, stocklending, repos and contracts for difference for the purposes of efficient portfolio management only, subject to the conditions and limits set out in the UCITS Notices and within any further limits laid down by the Financial Regulator from time to time. In particular, each Fund would engage in foreign exchange forwards to provide protection against exchange rate risks, including cross-currency hedging, and in order to hedge foreign currency exposure of the underlying assets of the Fund into the base currency of that Fund or into a currency 1
  16. 16. institutionally linked to the base currency. The use of such forwards would reduce the currency risk in respect of each Fund and will better enable each Fund to manage its assets and liabilities. At the discretion of the Directors, the Initial Funds or any Funds created in the future may use financial derivative instruments as a primary investment policy and details of the investment policy will be set out in the applicable Supplement in accordance with the requirements of the Financial Regulator. In the case of the Initial Funds, Shareholder approval will be sought in advance of such a change. Efficient portfolio management for the purposes set out above, means an investment decision involving transactions that are entered into for one or more of the following specific reasons: • a reduction of risk; • a reduction of cost; or • the generation of additional capital or income for a Fund with an appropriate level of risk, taking into account the risk profile of the Fund and subject to the conditions and limits as set out in the UCITS Notices and within any further limits laid down by the Financial Regulator from time to time. The Investment Manager will not utilise derivative positions which have not been included in the risk management process until such time as a revised risk management process has been submitted and cleared by the Financial Regulator. The Company will, on request, provide supplementary information to Shareholders relating to the risk management methods employed including the quantitative limits that are applied and any recent developments in the risk and yield characteristics of the main investments of the Funds. Dividend Policy Any dividend payment in respect of a Fund shall be made in accordance with the dividend policy of that Fund as set out in the applicable Supplement. It is currently intended that none of the Initial Funds will pay dividends or otherwise make distributions to Shareholders. Should this intention not to pay dividends or otherwise make distributions change in relation to any of the Initial Funds or future funds, Shareholders will be notified in advance and provided with the relevant updated Supplement. The Directors may elect to charge management fees and expenses out of the capital of a Fund as set out in the applicable Supplement, should they wish to generate distributable profits. Investors should note that by charging management fees and expenses of a Fund to capital, the effect of this is that capital may be eroded and income will be achieved by foregoing the potential for future capital growth. General Risk Factors Investors’ attention is drawn to the following general risk factors which may relate to an investment in any Fund. In addition to the risks set out below, any risks specific to a particular Fund will be as set out in the applicable Supplement. Market fluctuations Potential investors should note that the investments of each Fund are subject to market fluctuations. There is no assurance that any appreciation in the value of investments will occur or that the investment objective of any Fund will be achieved. The value of investments and the income derived therefrom may fall as well as rise and investors may not recoup the original amount invested. The difference between the cost of subscribing for Shares and the amount received on redemption means that any investment in the Company should be viewed as a medium to long-term investment. An investment should only be made by those who are able to sustain a loss on their investment. Currency risk Each Fund’s assets may, unless otherwise noted, be invested in securities denominated in currencies other than the relevant currency of such Fund and any income received by such Fund from its investments will be received in the currencies of such investments, some of which may fall in value against the relevant currency of such Fund. Each Fund will compute its Net Asset Value and make any distributions in the denomination of the Shares while each Fund may, from time to time, engage in forward foreign exchange transactions to provide protection against exchange-rate risk, there is no 2
  17. 17. guarantee that this objective will be achieved and consequently there is therefore a currency exchange risk which may affect the value of the Shares to the extent that the Fund makes investments in currencies other than the relevant currency of the Fund. Derivatives Risk A Fund may employ various investment techniques, such as, but not limited to, forward foreign exchange contracts, currency futures, swaps, options and swaptions thereon, put and call options on securities, indices, stock index and interest rate futures and options thereon, stocklending, repurchase, reverse repurchase, warrants and contracts-for-difference (together “derivatives”) in order to afford the protection of capital or the enhancement of investment returns. These derivative positions may be executed either on-exchange or over-the-counter. The primary risks associated with the use of such derivatives are (i) failure to predict accurately the direction of the market movements and (ii) market risks, for example, lack of liquidity or lack of correlation between the change in the value of the underlying asset and that of the value of a Fund’s derivatives. These techniques may not always be possible or effective in enhancing returns or mitigating risk. The use of cross-currency hedging in order to hedge foreign currency exposure of the underlying assets of a Fund on behalf of a Share class into the base currency of that Fund or into a currency institutionally linked to the base currency may adversely affect the Net Asset Value of Share classes in the respective Fund. A Fund’s investments in over-the-counter derivatives are subject to the risk of counterparty default. In addition, a Fund may have to transact with counterparties on standard terms which it may not be able to negotiate. Price movements of forward contracts, futures contracts, options, contracts for difference and other derivative contracts in which a Fund’s assets may be invested are influenced by among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments, and national and international political and economic events and policies. In addition, governments from time to time intervene, directly and by regulation, in certain markets, particularly those in currencies and interest rate-related futures and options. Such intervention often is intended directly to influence prices and may, together with other factors, cause all of such markets to move rapidly in the same direction because of, among other things, interest rate fluctuations. Moreover, since there is generally less government supervision and regulation of emerging market stock exchanges and clearing houses than in more developed markets, a Fund may also be subject to the risk of the failure of the exchanges on which its positions trade or of their clearing houses, and there may be a higher risk of financial irregularities and/or lack of appropriate risk monitoring and controls. Financial derivative instruments shall not be employed by the Company until such time that a risk management process has been submitted to and cleared by the Financial Regulator. The Company will not utilise derivative positions which have not been included in the risk management process until such time as a revised risk management process has been submitted and approved by the Financial Regulator. Leverage Risk A Fund’s possible use of borrowing, leverage or derivative instruments may result in certain additional risks. Leveraged investments, by their nature, increase the potential loss to investors resulting from any depreciation in the value of such investments. Consequently, a relatively small price movement in the security underlying a leveraged instrument may result in a substantial loss to a Fund. Counterparty and Broker Credit Risk A Fund will be exposed to the credit risk of the counterparties or the brokers and dealers and exchanges through which, it deals, whether it engages in exchange-traded or off-exchange transactions. A Fund may be subject to risk of loss of its assets held by a broker in the event of the broker's bankruptcy, the bankruptcy of any clearing broker through which the broker executes and clears transactions on behalf of a Fund, or the bankruptcy of an exchange clearing house. 3
  18. 18. Cross liability between funds The Company is established as a segregated portfolio company. As a matter of Irish law, the assets of one Fund will not be available to satisfy the liabilities of another. However, the Company is a single legal entity which may operate or have assets held on its behalf or be subject to claims in other jurisdictions which may not necessarily recognise such segregation. There is no guarantee that the courts of any jurisdiction outside Ireland will respect the limitations on liability associated with segregated portfolio companies nor is there any guarantee that the creditors of one Fund will not seek to enforce such Fund’s obligations against another Fund. Substantial repurchases Substantial repurchases by Shareholders may necessitate liquidation of investments. It is possible that losses may be incurred due to such liquidations that might otherwise not have arisen. Expenses Charged to Capital Shareholders should note that all or part of the management fees and expense of a Fund may be charged to the capital of a Fund as set out in the applicable Supplement. This will have the effect of lowering the capital value of the Shareholder’s investment. Taxation Any change in the Company’s tax status or in legislation could affect the value of investments held by the Company and affect the Company’s ability to provide a return to investors. Potential investors and Shareholders should note that the statements on taxation, which are set out herein and in each Supplement, are based on advice which has been received by the Directors regarding the law and practice in force in the relevant jurisdiction as at the date of this Prospectus and each Supplement. As is the case with any investment, there can be no guarantee that a tax position or proposed tax position prevailing at the time an investment is made in the Company will endure indefinitely. The attention of potential investors is drawn to the tax risks associated with investing in the Company, particularly the section headed “Taxation” starting on page 22. Temporary suspension Investors are reminded that in certain circumstances their right to redeem or convert Shares may be temporarily suspended as set out in more detail in the section headed “Suspension of Valuation” on page 17. Political and /or regulatory risks The value of a Fund’s assets may be affected by uncertainties such as international political developments, changes in government policies, changes in taxation, restrictions in foreign investment and currency repatriation, currency fluctuations and other developments in the laws and regulations of countries in which investments may be made. Controlling Shareholder There is no restriction on the percentage of the Company’s Shares that may be owned by one person or a number of connected persons. It is possible, therefore, that one person, including a person or entity related to the Investment Manager, or, a collective investment scheme managed by the Investment Manager, may obtain control of the Company or of a Fund. 4
  19. 19. MANAGEMENT AND ADMINISTRATION The Directors of the Company The Directors of the Company are responsible, inter alia, for establishing the investment objectives and policies of the Company and each Fund, for monitoring the Company’s performance and for the overall management and control of the Company. The following are the Directors of the Company:- Mr. Kevin Gallacher Kevin Gallacher is Joint Managing Director and Head of Business Development at Merrion Capital Investment Managers Limited. He joined Merrion Capital Investment Managers Limited (formerly Oppenheim Investment Managers Limited) in April 2001 having previously worked for the Frank Russell Company, a leading US investment consultancy. He has 16 years experience of the investment industry and has an MSc in investment analysis. Mr. Brian Hall Brian Hall is Finance Director at Merrion Capital Investment Managers Limited, with responsibility for finance and investment administration. After graduating with an M.A. in Economics from UCD, he worked with Ernst & Young and qualified as a Chartered Accountant in 1995. He is a member of the Institute of Chartered Accountants in Ireland and a director of the Irish Association of Investment Managers. He joined Merrion Capital Investment Managers Limited (formerly Oppenheim Investment Managers Limited) in 1998. Mr. Joseph O’Dwyer Joe O’Dwyer is Joint Managing Director and Chief Investment Officer at Merrion Capital Investment Managers Limited. He has over 20 years experience in the investment industry in both stockbroking and fund management. He joined Merrion Capital Investment Managers Limited (formerly Oppenheim Investment Managers Limited) from NCB Stockbrokers where he headed up the European Equity sales function. Prior to that he was investment manager with Smurfit Paribas Bank Ltd. Mr. Michael Hodson Michael Hodson is CFO of Merrion Capital Group, a Dublin–based stockbroking and corporate finance company. Mr. Hodson was a founding shareholder of Merrion which in December 2005 was sold to Landsbanki, the Icelandic bank. Prior to joining Merrion he had senior finance/compliance roles with Fexco Stockbroking and NCB Stockbrokers. Mr. John Conroy John Conroy is Chief Executive of Merrion Capital Group, a Dublin–based stockbroking and corporate finance company. Mr. Conroy was a founding shareholder of Merrion which in December 2005 was sold to Landsbanki, the Icelandic bank. He is also a director of eircom. All of the Directors are non-executive directors and their address, for the purpose of the Company, is the registered office of the Company. The Investment Manager and Promoter The Company has appointed Merrion Capital Investment Managers Limited to act as investment manager pursuant to the Investment Management Agreement. The Investment Manager was incorporated as a limited liability company on 11 July 1985 and is authorised as an investment firm and regulated by the Financial Regulator. The Investment Manager is a wholly-owned subsidiary of Merrion Capital Group Limited. As of 31 December 2007, the Investment Manager had approximately €1 billion of funds under management. The Investment Manager may, from time to time, appoint investment advisers (who will be paid out of the Investment Manager’s fee) in accordance with the requirements of the Financial Regulator. Details of any such investment adviser will be provided to Shareholders on request and will be disclosed in the periodic reports and in the applicable Supplement. 5
  20. 20. The Distributor The Company has appointed Rabodirect (a registered business name in Ireland of Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.) to act as distributor of the Shares pursuant to the Distribution Agreement between the Company and the Distributor. The Administrator The Company has appointed Northern Trust International Fund Administration Services (Ireland) Limited as administrator pursuant to the Administration Agreement. Northern Trust International Fund Administration Services (Ireland) Limited is a private limited liability company incorporated in Ireland on 15 June 1990 and is an indirect wholly-owned subsidiary of Northern Trust GFS Holdings Limited which in turn is wholly owned by Northern Trust Corporation. Northern Trust Corporation and its subsidiaries comprise the Northern Trust Group, one of the world’s leading providers of global custody and administration services to institutional and personal investors. As at 31 December 2006 the Northern Trust Group’s assets under custody and administration totalled in excess of US$3.5 trillion. The principal business activity of Northern Trust International Fund Administration Services (Ireland) Limited is the administration of collective investment schemes. The registered office of Northern Trust International Fund Administration Services (Ireland) Limited is Georges Court, 54-62 Townsend Street, Dublin 2, Ireland. The administration duties and functions of the Administrator will include, inter alia, the calculation and publication of the Net Asset Value, the provision of facilities for the confirmation and registration of Shares, the keeping of all relevant records and accounts of the Company and assisting with compliance by the Company with the reporting requirements of the Financial Regulator. The Administrator may, with the prior consent of the Directors and in accordance with the requirements of the Financial Regulator, delegate some or all of its duties to an affiliate. The Administrator will also act as registrar and transfer agent of the Company. The Custodian The Company has appointed Northern Trust Fiduciary Services (Ireland) Limited as custodian of its assets pursuant to the Custodian Agreement. The Custodian is a company incorporated in Ireland as a limited liability company on 20 December 1989 and is a wholly owned subsidiary of Northern Trust Corporation. Northern Trust Corporation is one of the world’s leading providers of global custody and asset administration services to institutional and personal clients. At 31 March 2006, Northern Trust Corporation had assets under custody and administration in excess of US$3.2 trillion. The Custodian has been approved by the Financial Regulator to act as custodian for the Company. Conflicts of Interest Due to the operations which are or may be undertaken by the Investment Manager, the Administrator, the Custodian and the Directors and their respective holding companies, subsidiaries and affiliates (each an “interested party”), conflicts of interest may arise. An interested party may acquire or dispose of any investment notwithstanding that the same or similar investments may be owned by or for the account of or otherwise connected with the Company. Furthermore, an interested party may acquire, hold or dispose of investments notwithstanding that such investments had been acquired or disposed of by or on behalf of the Company by virtue of a transaction effected by the Company in which the interested party was concerned provided that the acquisition or disposal by an interested party of such investments is effected on normal commercial terms as if negotiated on an arm’s length basis in the best interests of the Shareholders. Any such dealings are subject to: (1) a certified valuation of a transaction by a person appointed by the Directors and approved for such purpose by the Custodian as independent and competent is obtained; or (2) execution on best terms on an organised investment exchange in accordance with the rules of such exchange; or (3) where (1) and (2) are not practical, the transaction is executed on terms which the Custodian is, or the Directors in the case of a transaction involving the Custodian are, satisfied are normal commercial terms negotiated at arm's length and are in the best interests of Shareholders. 6
  21. 21. The Investment Manager, the Custodian, the Administrator and/or their affiliates may invest, directly or indirectly, or manage or advise other investment funds or accounts which invest in assets that may also be purchased or sold by the Company. Neither the Investment Manager nor any of its affiliates is under any obligation to offer investment opportunities of which any of them becomes aware to the Company or to account to the Company in respect of (or share with the Company or inform the Company of) any such transaction or any benefit received by any of them from any such transaction. In the event that a conflict of interest does arise, the Directors will endeavour to ensure that any such conflict is resolved fairly and in the best interests of the Shareholders. 7
  22. 22. SUBSCRIPTIONS, TRANSFERS AND REDEMPTIONS Subscriptions The Directors shall, before the Initial Offer of Shares in any Fund, determine the terms on which such Shares will be issued, details of which will be as set out in the applicable Supplement. After the relevant Closing Date for each Fund, the Company may offer Shares in each Fund on each Subscription Date at an issue price equal to the Net Asset Value per Share of the relevant Fund on each Valuation Date. During any period of net subscriptions, a charge may be added, at the discretion of the Directors, to the purchase price per Share and deducted directly from the subscription proceeds, to cover the dealing costs involved in purchasing investments in the underlying investments of the relevant Fund as set out in the applicable Supplement. The charge is intended to protect existing and continuing Shareholders against the dilution of the value of their investment on account of these charges. In addition, the Directors may in their absolute discretion charge a subscription fee, payable to the Investment Manager, of up to 4 per cent. of the aggregate investment amount subscribed. This fee may be paid in full or in part by the Investment Manager to introducing agents and intermediaries. Where the amount subscribed for Shares is not equivalent to an exact number of Shares, fractions of Shares may be issued and will be rounded to the fourth decimal place. All applications for Shares must be received by post, delivery or fax (with the signed original to follow as soon as possible after) by the Administrator at its respective addresses no later than 4.00pm (Dublin time) respectively on the relevant Subscription Date. The procedure for subscribing for Shares, the Minimum Subscription amount applicable and details of any subscription charges for each Fund will be as set out in the applicable Supplement. Before subscribing for Shares, an applicant who is not an Irish Resident or is an Exempt Irish Resident will be required to complete a declaration in a form prescribed by the Revenue Commissioners of Ireland. Such declaration will be included in the application form, which is available from the Administrator. Each Shareholder must notify the Administrator in writing of any change in the information contained in the application form and furnish the Administrator with whatever additional documents relating to such change as it may request. Measures aimed at the prevention of money laundering may require an applicant to provide verification of identity, verification of address and source of funds to the Administrator. The Administrator reserves the right to request such information as is necessary to verify the identity, address and source of funds of the applicant. This information may also include details as to the tax residency of an applicant pursuant to the requirements of the EU Savings Directive together with relevant documentary evidence. Depending on the circumstances of each application, a detailed verification of the source of funds might not be required where (i) the investor makes payment from an account held in the investor's name at a recognised financial institution or (ii) the application is made through a recognised intermediary. These exceptions will only apply if the financial institution or intermediary referred to above is located within a country recognised in Ireland as having equivalent anti-money laundering regulations or satisfies other applicable conditions. In the event of delay or failure by the applicant to produce any information required for verification purposes, the Administrator or the Directors may refuse to accept the application and all subscription monies. The Administrator may also refuse to process a redemption if any requested information is not received. The Administrator, working in conjunction with the designated anti-money laundering reporting officer of the Company, will notify applicants if additional proof of identity is required. By way of example, an individual may be required to produce a copy of a current passport or identification card together with two pieces of evidence of the applicant's address, such as a utility bill or bank statement. In the case of corporate applicants, this may require production of a certified copy of the certificate of incorporation (and any change of name), bye-laws, memorandum and articles of association (or 8
  23. 23. equivalent), and the names and addresses of all directors and beneficial owners. Detailed verification of directors' and substantial beneficial owners' identity and address may also be required. Shares will not be issued until such time as the Administrator has received and is satisfied with all the information and documentation required to verify the identity, address and source of funds of the applicant. This may result in Shares being issued on a Subscription Date subsequent to the Subscription Date on which an applicant initially wished to have Shares issued to him/her. It is further acknowledged that the Administrator shall be held harmless by the applicant against any loss arising as a result of the failure to process the subscription if such information as has been requested by the Administrator has not been provided by the applicant. Shares will be issued in registered form. Contract notes will normally be issued within two Business Days of the determination of the Net Asset Value in respect of the relevant Subscription Date on which the application is being processed. Share certificates will not be issued. Investors will not be entered onto the register of Shareholders if they subscribe for less than the Minimum Subscription (or such other amount as the Directors have in their absolute discretion determined). Shares will be issued upon: (i) fulfilment of the conditions for acceptable subscriptions; (ii) the provision of all relevant money laundering documentation; and (iii) receipt of cleared funds by the Company and the Administrator within three Business Days of the relevant Subscription Date and in accordance with the terms and conditions of the Prospectus and Supplements in force at the time of the subscription. Failure by the Company to receive cleared funds within three Business Days of the relevant Subscription Date will result in the cancellation of the allotted Shares. The Administrator will normally issue a completion notice after the Shares have been issued and this will constitute a written confirmation of ownership of the Shares. Any gains or losses incurred by the Company as a result of any such cancellation shall be for the account of the relevant Fund. The Directors have discretion to accept settlement after the Closing Date, in the case of Shares allotted pursuant to the Initial Offer, and after the relevant Valuation Date, in the case of Shares allotted on a subsequent Subscription Date, in order to deal with any contingencies which may arise in the transfer of subscription monies. Investors will be required to agree to indemnify and hold harmless the Company, the Directors, the Investment Manager, the Administrator and the Custodian for any losses, costs or expenses incurred by them as a result of the failure or default of the investor to transmit subscription monies in immediately available funds to the account of the Company within the time specified in the applicable Supplement. In addition, the Directors or the Administrator will refuse to process a redemption request until proper information has been provided including any relevant money laundering documentation. The Directors may, in their absolute discretion, accept payment for Shares by a transfer in specie of assets, the nature of which would qualify as investments of a Fund in accordance with the investment policy and restrictions of the relevant Fund and the value of which (including the Net Asset Value per Share, thereof) shall be determined by the Administrator, having consulted with the Investment Manager and the Custodian, in accordance with the valuation principles governing the Company and applicable law. The Directors and the Custodian will also ensure that the number of Shares issued in respect of any such in specie transfer will be the same amount which would have fallen to be allotted for settlement in cash. Any prospective investor wishing to subscribe for Shares by a transfer in specie of assets will be required to comply with any administrative and other arrangements (including any warranties to the Company in relation to the title of such assets being passed to the Custodian, if applicable) for the transfer specified by the Custodian and the Administrator. In addition, the Directors must ensure that any assets transferred will be vested with the Custodian on behalf of the Company. The Directors and the Custodian must be satisfied that any such in specie transfer will not result in any material prejudice to existing Shareholders. The Directors may, in their absolute discretion, reject any application for Shares in full or in part. Amounts paid to the Company in respect of subscription applications which are rejected (or, in the case of applications which are not accepted in full, the balance of the amount paid) will be returned to the applicant at his/her own risk and expense without interest. Transfers The transferor shall be deemed to remain the holder of any Shares that it proposes to transfer until the 9
  24. 24. name of the transferee is entered in the Company’s register of members in respect of those Shares. In respect of the Shares, each transferee will be required to provide the same information, representations and warranties to the Company and the Administrator as are required from any applicant for Shares. The Company will be required to account for tax on the value of the Shares transferred at the applicable rate unless it has received from the transferor a declaration in the prescribed form confirming that the Shareholder transferring its Shares is not an Irish Resident or is an Exempt Irish Resident. The Company and the Administrator reserve the right to redeem such number of Shares held by a transferor as may be necessary to discharge the tax liability arising. The Company and the Administrator reserve the right to refuse to register a transfer of Shares until it receives a declaration as to the transferee’s status and residency in the form prescribed by the Revenue Commissioners of Ireland. Redemptions After the relevant Closing Date for each Fund, the Company may accept requests for redemptions on each Redemption Date at a price equal to the Net Asset Value per Share of the relevant Fund on such Redemption Date. Requests for redemption may be made by post, delivery or fax (with the signed original to follow as soon as is possible) to the Administrator for on a completed redemption request (which is available on request from the Administrator) so as to be received by no later than 4.00pm (Dublin time) on the relevant Redemption Date on which the Shares are to be redeemed. Redemption requests must be sent to the Administrator to be received no later than 4.00pm. During any period of net redemptions, the redemption price per Share may be reduced, at the discretion of the Directors, by a charge in respect of each Fund to cover the dealing costs involved in redeeming investments in the underlying investments of the relevant Fund as set out in the applicable Supplement. The charge is intended to protect existing and continuing Shareholders against the dilution of the value of their investment on account of these charges. The procedure for redeeming Shares and details of any redemption charges will be as set out in the applicable Supplement. Redemption requests may be sent by post or facsimile but redemption proceeds will not be remitted until the Administrator has received the original of the redemption request including any relevant money laundering documentation. Redemption requests will only be processed on receipt of faxed instructions where payment is made to a bank account on record. In addition, the Administrator or the Directors will refuse to process a redemption request until proper information has been provided. Any amendments to a Shareholder’s registration details or payment instructions will only be effected upon receipt of original documentation by the Administrator. The Company and the Administrator will be required to withhold tax on redemption monies at the applicable rate unless it has received from the Shareholder a declaration as to status and residency in the form prescribed by the Revenue Commissioners of Ireland confirming that the Shareholder is either (i) not an Irish Resident, or (ii) an Exempt Irish Resident, in each case in respect of whom it is not necessary to deduct tax. The Directors have the power to pay redemption proceeds in specie, provided that the Directors and the Custodian are satisfied that the terms of any exchange shall not be such as are likely to result in any material prejudice to any remaining Shareholders. Subject to the agreement of the relevant Shareholder, any such in specie redemption must be made on such terms and conditions as the Directors may specify, to such Shareholder of assets equalling the aggregate redemption price (or together with any such cash payment when aggregated with the value of the assets being redeemed are equal to such redemption price). Where redemption of Shares is to be satisfied by an in specie redemption of assets held by the Company, the Custodian shall transfer such assets as the Directors shall direct and the Custodian has approved to the Shareholder as soon as practicable after the relevant Subscription Date. All costs and risks of such redemption shall be borne by such Shareholders. Shares redeemed shall be deemed to cease to be in issue at the close of business on the relevant Redemption Date in respect of the redemption and such redeemed Shares shall be cancelled. 10
  25. 25. Conversion of Shares With the consent of the Directors, a Shareholder may convert Shares of one Fund into Shares of another Fund or, Shares of one class within a Fund into Shares of another class within the same Fund on giving three days’ notice to the Administrator in such form as the Administrator may require. The conversion is effected by arranging for the redemption of Shares of one Fund, converting the redemption proceeds into the currency of another Fund, and subscribing for the Shares of the other Fund with the proceeds of the currency conversion. No conversion fee will be levied. During the period between the determination of the Net Asset Value applicable to the Shares being redeemed and the subscription for Shares, the Shareholder will not be the owner of, or be eligible to receive dividends with respect to, either the Shares which have been redeemed or the Shares being acquired. Conversion will take place in accordance with the following formula:- NSH = OSH x RP SP where:- NSH = the number of Shares which will be issued in the new Fund; OSH = the number of the Shares to be converted; RP = the Net Asset Value of the Shares to be converted after deducting the redemption fee, if any; and SP = the issue price of Shares in the new Fund on that Business Day after deducting the subscription fee, if any. If NSH is not a whole number of Shares the Administrator reserves the right to issue fractional Shares in the new Fund or to return the surplus arising to the Shareholder seeking to convert the Shares. A Shareholder is not required to submit a new application form for the purchase of Shares in connection with a conversion. Deferral of Redemptions The Directors may, in their absolute discretion, limit the number of Shares that can be redeemed on any one Redemption Date to 10 per cent. of the Net Asset Value of the applicable Fund. In this event, the limitation will apply pro rata so that all Shareholders wishing to have their Shares redeemed on that Redemption Date redeem the same proportion of such Shares, and Shares not redeemed will be carried forward for redemption on the next Redemption Date and all following Redemption Dates (in relation to which the Company will carry out the same procedure as described herein) until the original request has been satisfied in full. If requests for redemption are so carried forward, the Administrator will inform the Shareholders affected. Redemption requests carried forward will have priority over redemption requests received in respect of subsequent Redemption Dates. Compulsory Redemptions The Directors may compulsorily redeem or transfer any holding of Shares if it comes to their attention that those Shares are being held directly or beneficially by any person who he is not entitled to apply for Shares as described more fully in the section headed “Investor Restrictions” below. The Directors also reserve the right to the compulsory redemption of all Shares held by a Shareholder if the aggregate Net Asset Value of the Shares held by the Shareholder is less than the Minimum Holding specified in the applicable Supplement. Prior to any compulsory redemption of Shares, the Directors will notify the Shareholder in writing and allow such Shareholder thirty days to purchase additional Shares to meet this minimum holding requirement. Suspension of Subscriptions, Transfers, Conversions and Redemptions 11
  26. 26. Subscriptions, transfers, conversions and redemptions for any Fund will be suspended for as long as the calculation of the Net Asset Value of that Fund is suspended as more fully described in the section headed “Valuation - Suspension of Valuation” on page 16. Any applications for subscriptions, transfers, conversions and redemptions for a Fund will be considered on the first Subscription Date or Redemption Date, as applicable, following the termination of a suspension. Investor Restrictions Potential investors should note that restrictions apply regarding the types of persons to whom Shares may be issued and transferred for the purpose of ensuring that no Shares are held by any person or persons:- (i) in breach of the law or requirements of any country or governmental authority; or (ii) in circumstances (whether directly or indirectly affecting such person or persons and whether taken alone or in conjunction with any other person or persons, connected or not, or any other circumstance appearing to the Directors and the Administrator to be relevant) where, in the opinion of the Directors and the Administrator, such holding might result in taxation, legal, pecuniary, regulatory or material administrative disadvantage to the Company or its Shareholders as a whole. Abusive Trading Practices Excessive, short-term (or market timing) or other abusive trading practices may disrupt portfolio management strategies and harm Fund performance. To minimise harm to a Fund and its Shareholders, the Directors, working in conjunction with the designated anti-money laundering reporting officer, reserves the right to reject any subscription (including any transfer) from any investor whom it believes has a history of abusive trading or whose trading, in its judgement, has been or may be disruptive to a Fund. In making this judgement, the Directors may consider trading done in multiple accounts under common ownership or control. 12
  27. 27. VALUATION Net Asset Value The Net Asset Value of the Company and of each Fund or of each class of Shares, as the case may be, will be calculated by the Administrator at the relevant Valuation Point for each Valuation Date in accordance with the principles more fully described in the section headed “Valuation Principles” below. The Net Asset Value of each Fund is, as at any Valuation Point, the aggregate value of the assets attributable to each Fund (including, without limitation, any unamortised expenses) less the aggregate liabilities attributable to each Fund (including, without limitation, its accrued expenses including any Performance Fee accrual and such amount in respect of contingent or projected expenses as the Directors consider fair and reasonable). The Net Asset Value per Share in each Fund will be calculated by dividing the Net Asset Value of such Fund by the number of Shares in issue in respect of that Fund. Where a Fund is made up of more than one class of Shares, the Net Asset Value of each class of Shares will be calculated by determining that part of the Net Asset Value of each Fund attributable to each such class of Shares and dividing this value by the number of Shares of that class in issue to the nearest four decimal places to give the Net Asset Value per Share. Any increase or decrease in the Net Asset Value of each Fund will be allocated between the Share classes based on their pro rata Net Asset Values. The Net Asset Value of Share classes denominated in currencies other than the base currency of a Fund will be calculated using the relevant exchange rate prevailing at the relevant Valuation Point. Where classes of Shares denominated in different currencies are created within the Fund and currency hedging transactions are entered into in order to hedge any relevant currency exposure, such transactions will be clearly attributable to a specific Share class and any costs and gains/losses of the hedging transactions will accrue solely to the relevant class of Shares. Furthermore, no currency Share class may be leveraged as a result of using such currency hedging transactions. Any currency hedging will be limited to 100% of the Net Asset Value attributable to each class of Shares. The costs and gains/losses of the hedging transactions will accrue solely to the relevant class of Shares. This strategy may substantially limit Shareholders of the class of Shares from benefiting if the class currency falls against the base currency and/or the currency in which the assets of a Fund are denominated. The Net Asset Value per Share will increase or decrease in accordance with profits earned or losses incurred by the Company. Allocation of Assets and Liabilities The Articles of Association require the Directors to establish separate Funds in the following manner: (a) the proceeds from the issue of each Share shall be applied in the books and records of a Fund established for that Share, and the assets less the liabilities plus income less expenditure attributable thereto shall be applied to such Fund subject to the provisions of the Articles of Association; (b) where any asset is derived from another asset (whether cash or otherwise), the derived asset shall be applied to the same Fund as the assets from which it was derived and on each revaluation of an asset the increase or diminution in value shall be applied to the relevant Fund; (c) in the case of any asset which the Directors do not consider as attributable to a particular Fund, the Directors shall have discretion, subject to the approval of the Custodian, to determine the basis upon which any such asset shall be allocated between Funds and the Directors shall have the power at any time, subject to the approval of the Custodian, to vary such basis provided that the approval of the Custodian shall not be required in any such case where the asset is allocated between all Funds pro rata to their net asset values at the time when the allocation is made; and 13
  28. 28. (d) the Directors shall have the discretion, subject to the approval of the Custodian, to determine the basis upon which any liability (which, without limitation, may include all operating expenses of the Company such as stamp duties, taxes, brokerage or other expenses of acquiring and disposing of investments, the fees and expenses of the auditors and legal advisers, the costs of printing and distributing reports, accounts and any Prospectus, publishing prices and any relevant registration fees, etc.) shall be allocated between Funds (including conditions as to the subsequent re-allocation thereof if circumstances so permit) and shall have the power at any time and from time to time to vary such basis, provided that the approval of the Custodian shall not be required in any such case where a liability is allocated between the Funds pro rata to their Net Asset Values. Valuation Principles The Net Asset Value for each class of Shares shall be determined separately by reference to the Fund appertaining to that class of Shares and to each such determination the following provisions shall apply:- (1) The Net Asset Value of each Fund shall be determined and shall be equal to the value as at the relevant Valuation Point of all the assets, less all the liabilities, of that Fund. (2) The assets of a Fund shall be deemed to include:- (a) all cash in hand, on loan or on deposit, or on call including any interest accrued thereon; (b) all bills, demand notes, promissory notes and accounts receivable; (c) all bonds, certificates of deposit, shares, stock, units in collective investment schemes, debentures, debentures stock, subscription rights, warrants, options and other investments and securities owned and contracted for, (other than rights and securities issued by it); (d) all stock and cash dividends and cash distributions which the Directors consider will be received by the Company in respect of a Fund but which have not yet been received by it but have been declared payable to stockholders of record on a date before the day as of which the assets are being valued; (e) all interest accrued on any interest-bearing securities forming part of a Fund; and (f) all prepaid expenses including dividends receivable by the Company relating to that Fund and a proportion of any prepaid expenses relating to the Company generally, such prepaid expenses to be valued and defined from time to time by the Directors. (3) Any expense or liability of the Company may be amortised over such period as the Directors (with the approval of the Auditors) may determine (and the Directors may at any time and from time to time determine with the approval of the Auditors to lengthen or shorten any such period), and the unamortised amount thereof at any time shall also be deemed to be an asset of the Company. (4) Assets shall be valued as follows:- (a) deposits shall be valued at their principal amount plus accrued interest from the date on which the same was acquired or made; (b) investments or assets listed, quoted or dealt in on a Recognised Market, save as otherwise herein provided, shall be valued at the Valuation Point in each case being the latest mid-market price (being the average of the bid and offer prices) on the Recognised Market on which these assets are traded or admitted for trading (being the Recognised Market which is the sole or in the opinion of the Directors the principal Recognised Market on which the investment in question is listed, quoted or 14
  29. 29. dealt in). If, in the sole opinion of the Directors, the dealing price (which will be the latest mid-market price) for the assets, calculated as at the Valuation Point is not representative of the value of the assets, the value will be the probable realisation value, estimated with care and in good faith by such competent person as may be appointed by the Directors and approved for the purpose by the Custodian; (c) exchange traded futures and options contracts (including index futures) shall be valued at the settlement price as determined by the market in question. If such market price is not available, the value shall be the probable realisation value estimated by an independent party appointed by the Directors and approved for the purpose by the Custodian. Off-exchange derivative contracts shall be valued by the counterparty on a daily basis. The valuation must be approved or verified weekly by a third party who is independent of the counterparty and who is appointed by the Directors and approved for the purpose by the Custodian. Forward exchange contracts shall be valued by reference to the price at which a new forward contract of the same size and maturity could be undertaken. As foreign exchange hedging may be utilised for the benefit of a particular type of Share within a Fund, its costs and related liabilities and/or benefits shall be for the account of that Share type only. Accordingly, such costs and related liabilities and/or benefits will be reflected in the Net Asset Value per Share for Shares of any such type; (d) securities quoted, listed or normally dealt in on more than one market, the Directors or their delegate shall adopt as the value thereof the relevant price on the market which, in their opinion, provides the principal market for such securities; (e) at any time when dealing prices are not available in respect of assets listed, quoted or dealt in on a Recognised Market in each case on the Recognised Market on which these assets are traded or admitted for trading (being the Recognised Market which is the sole or in the opinion of the Directors or their delegate the principal Recognised Market on which the investment in question is listed, quoted or dealt in), the value of the assets will be the probable realisation value estimated with care and in good faith by such competent person as may be appointed by the Directors and approved for the purpose by the Custodian; (f) any investments or assets not listed, quoted or dealt in on a Recognised Market shall be valued at the probable realisation value as determined with care and in good faith by such competent persons as may be appointed by the Directors and approved for the purpose by the Custodian; (g) securities listed or traded on a Recognised Market but acquired or traded at a premium or at a discount outside or off the relevant market may be valued, taking into account the level of premium or discount at the date of the valuation. The Custodian must ensure that the adoption of such a procedure is justifiable in the context of establishing the probable realisation value of the security; (h) cash shall be valued at face value (together with accrued interest to the relevant Valuation Date) unless, in the opinion of the Directors, any adjustment should be made to reflect the value thereof in the context of currency, marketability, dealing costs and/or such other considerations as are deemed relevant; (i) the value of units or shares or other similar participation in any Collective Investment Scheme shall be valued at the latest mid-market price or, if unavailable, the last available Net Asset Value as published by the Collective Investment Scheme; and (j) notwithstanding the foregoing, the Directors may permit some other method of valuation to be used for any particular asset if they consider that such valuation better reflects the fair value of that asset, such other method to be approved by the Custodian. 15
  30. 30. (5) Currencies or values in currencies other than in the currency of designation of a particular Fund shall unless the Directors determine otherwise be converted or translated at the rate which the Investment Manager after consulting with, or in accordance with, the method approved by the Custodian may consider appropriate having regard (inter alia) to any premium or discount which may be relevant and to costs of exchange into the currency of designation of that Fund. (6) For the purpose of valuing the Company’s assets as aforesaid the Directors may rely upon the opinions of any person(s) who appear to them to be competent to value assets by reason of any appropriate professional qualification or of experience of any relevant market. (7) The liabilities of a Fund shall be deemed to include all liabilities (including charges incurred on the acquisition and realisation of investments) and such operating expenses (that the Directors consider to be attributable to a particular Fund, and such amount as the Directors determine to provide in respect of contingent liabilities) of whatsoever kind and nature except liabilities represented by Shares in the Company. In determining the amount of such liabilities the Directors may calculate any liabilities on an estimated figure for yearly or other periods in advance and accrue the same in equal proportions over any such period. Where the Directors have created different classes of Shares within a Fund and have determined that each class will incur different levels of fees (the details of which shall be set out in the applicable Supplement for that Fund), the Administrator shall adjust the Net Asset Value per class in order to reflect such different levels of fees payable in respect of each class. (8) The Net Asset Value of each Fund may be certified by a Director of the Company or by any other person authorised to give such certificate by the Directors and any such certificate shall be binding and conclusive as to the Net Asset Value of such Fund in the absence of manifest error. (9) Any increase or decrease in the Net Asset Value of each Fund is attributed to the different classes of Shares within each Fund based on their respective pro-rata closing Net Asset Values. The Net Asset Value attributed to each class is then divided by the number of Shares of the relevant class in issue to give the Net Asset Value per Share of each class of Share of that Fund. Suspension of Valuation The Directors may at any time temporarily suspend the calculation of the Net Asset Value of the Company or any Fund during:- (a) any period when any of the principal markets or stock exchanges on which a substantial part of the investments of the relevant Fund are quoted is closed, otherwise than for ordinary holidays, or during which dealings thereon are restricted or suspended; (b) any period when, as a result of political, economic, military or monetary events or any circumstances outside the control, responsibility and power of the Directors, disposal or valuation of a substantial part of the investments of the relevant Fund is not reasonably practicable without this being seriously detrimental to the interests of the Shareholders in the relevant Fund or if, in the opinion of the Directors, the Net Asset Value of the relevant Fund cannot be fairly calculated; or (c) any breakdown in the means of communication normally employed in determining the value of the investments of the relevant Fund or when for any reason the current prices on any market of a substantial part of the investments of the relevant Fund cannot be promptly and accurately ascertained. Any such suspension will be notified to the Financial Regulator (for each class of Shares) immediately and, where possible, all reasonable steps will be taken to bring any period of suspension to an end as soon as possible. Publication of the Net Asset Value 16
  31. 31. The Net Asset Value per Share of each Fund as calculated for each Valuation Point will be published daily on the Investment Manager’s website www.merrion-capital.com and such other media as the Directors may from time to time determine. The Net Asset Value per Share will be available from the Administrator. Such information is published for information only; it is not an invitation to subscribe for, redeem or convert Shares at that Net Asset Value. 17

×